poverty that sprung from the awful doldrums under jimmy cart tear apply fortunately more strongly today. >> how so? >> well, obama is the same kind of antibusiness president and antienterprise president same kind of managerial interfering, strangle, suppressing with president that jimmy carter was. >> you write in here about president obama and i want to get to the right page so i can quote it correctly. you under the obama administration the u.s. experienced a morbid of the infrastructure of the economy, the public sector become a manipulative force intervenes in the financial sectors with gowrn
tee that attract talent and -- [inaudible] >> the worst this is the grain cast of the obama administration. and the epa now has a game control over [inaudible] has deemed a po lou assistant, danger to the environment. and co2 is the manhattan and keeps us alive. the circle of life and attempt to oppress co2 epitomizes the kind of antinature, antiimper prize spirit of the administration. it's the reason we need another supply side of the same kind we had under ronald reagan. >> would you change anything you wrote in the original "wealth and poverty." >> i would have changed quite a lot.
i mean, there. all kind of detail that have changed. but i found that do try to change one thing would be to change everything. so, you know, you have in to a bunch of editorial work. instead of changing it, i essentially retained the old book and added 30,000 new words at the beginning and end. and revision of my monetary policy in the middle. and so it's a new book. but it contains the old book. >> and when you say a revights of the monetary politician. what cow do you mean by that? >> well, i fail to make clear in the original version of wealthy and poverty that i believe that stable currency. i don't believe in floating currency. i agree with steve forbes that
foreign currency can is standard of value by which every imeerp europe has to guide the investment and decisions is like floating the hour so that people wouldn't have to work so many. one month you'd have the hour worth 50 minutes. the next is 70 minutes and you'd soon have an hour. the swats and insurance policy just to guide the economy. one of the things that happened over the last decade is that we've had a -- of fitness -- [inaudible] of we imper prize. and the reason for excess of phenomenon. the reason it's the wealthy and chi has migratedded to fitness. the currency is so unstable. so much money can be made in
betting on the ups and downs of our currency and against foreign currencies inspect is a big danger today. a lot of people attack the chinese for manipulating the currency, but the chinese just want to keep the ciewrpt sei stable. that's all the chinese want to do. they to maintain the dplar as a starpt of value. it's us that are debauching the currency. the threat to the american dollar does to the come in bay shinning, they defend the dollar. the threat comes from washington and wall street. >> and i made that new argument in the new edition of wealthy and poverty. >> you where in the book wealthy and poverty. the united states over the last decade has witnessed a classic confrontation between the forces of impearlial capitalism and
those of established institutions claiming a higherrer have chiewr, expertise and political standing. one side on unforced profit of enterprise, the other on represent and tolls arch privileges at the treasury. the federal reserve and the white house. >> and that is exactly what we have had. you know, when michael lewis wrote that book the big short. he was writing about all the gaggle and hedge end and the best against the big banks who were all supporting these sub prime mortgage concoctions and con fecks and scams. and it was all the most prestige use forces and the u.s. and the world economy that backed this blind side, as i call did, people who were investment in
these crazy con contacted mortgage security in which the value was totally unknown by people who really investing in it. and so the people who were shorting these were these hedge fund. and venture fund and private equity fund. automatic these are not seeking special government favor the. the big bank the goldman of the sack of the world were intimate with government. and of the government i.t. was mandating the purchase of these credit default swaps and other device which is ended upbringing down the economy. >> is the . >> it's not pro-- to support goldman sacks. and the embrace with the department of the treasury. >> is the supply side economics dead?
>> sup pry economics is true economics. and and actually excited to mitt romney running for president because bain company was one of the providers of the foundation of supply side economics. there are -- they applied it to business that. they showed how the most effectivive way for businesses to gain share market share was to cut the prices. and you could cut prices at your business gaining market share because cost drop by about 20 to 30% with each doubling of total units that sold. the cost general economies 77 scale and learning. called the learning curve and
this is really the foundation of supply side economics. why when you cut taxes, which are just like a price, you reduce costs across the economy and allow the united states to expand the global share of the ever markets or enterprise and wealthy. that's why supply side economics works. it's not merely by balancing the budget or overcoming debt or one of these accounting gem micks that are often treated as conservative economics. it's opening the horizon to the economy to human creativity. and human creativity always comings as a surprise to us. you can't plan it. if you get k plan it, you wouldn't need it. >> can p mitt romney use the
phrase politically supply side economics. i think he could if he says that he's reviving the reagan administration. the book was quoted more by -- president reagan most quoted author. he quotedded the book regularly throughout the administration. and reagan didn't balance the budget. he had actually during the reagan administration there was a trillion dollar enclose in government debt. he was winning the cold war. but the private sector increased the assets by some 17 trillion that ares.
the private economy was all in the red. and what really matters is not just the account. that's the theme. it's the [inaudible] and ultimately too much debt is unfortunate. but what matters is not so much the liability of the economy, it's the assets and under reagan's supply side movement, the private assets of the american economy boomed. and so the liability became less significant in our economy thrived throughout the period. >> george, a lot of fellow travelers from the past on the sup ply side have let go of the they theory. >> yep. a lot of them become involved in
it the silly analysis of what happened after clinton raises tax rates or clinton drastically lowered the capital gains tax and that was where most of the new revenues came. but in general, fifty nations around the world have reduced their tax breaks sin wealthy and poverty was published. and draysly reduced the tax rates. not of these have flat tax an in all the countries of revenues of boom there hasn't been a big crisis of spending and estonia. there's a vast boom in estonia with the 12% flat tax and the fact is that sup ply side
economics is booming around the world. it's only in the united states that some souls are shrinking from there economic of enterprise. >> what's your analysis of what's happening in donald rumsfeld would call old europe. >> old europe is flawing for the indulgent due luges of the welfare staid. they have all accepted again on centralized government and thus have destroyed vat l of their assets. when you detroit value of your assets ultimate i are the human being who would make your economy go, their investments and creation and work effort and make the economy -- when you depreciate those asset. the liability become
impossible. it you unleash the asset of your economy, allow the stock market to boom and real estate to thrive again, then all of sudden the liabilities that seem impossible today become manageable in the future. >> george, when you see the fight in congress over the debt ceiling or tax rates or balance budget, what would you like to see congress do and how important is raising the debt ceiling in the u.s. >> i don't even -- that's all just a kind of theater the absurd of what we need to do is to flat. our tax rates and deregulate. in the book, i tell the stories of new disee zealand, israel, a number of countries that have
faced crisis far exceeding our current predicament. and new zealand is one of favorites. it was the third richest country in the world in the 1930s and by the 1980s it was the third world country. and it couldn't even feed itself. and 5% -- 45% of all agricultural revenue came from the deposit. it was socially a socialist country. they flat end out all of their government spending. eliminating alling a churm sub i dids and new see land began feeding itself and became the great source of the food around the world and competed in dairy with wisconsin so aggressively that the wisconsin dairymen
accused of them of unfair trading practice alls all the way from new zealand. it is the great vanity of bureaucrats that somehow their jobs are awfully important. but after the second world war, we eliminated 150,000 bureau crateds, millions of federal workers and the same economists are therefore bearers. instead the growth rate double 7 million new jobs were created and we entered 1950 to the greater extend a boom in the
u.s. economy and this was after eliminating the entire government today and it just and the same thing happened in new zealand. whatever you reach a crisis and really drastically retrench government interfreerns and regulation and tax rate, the economy taxes off. everybody is stunned. and in a particularly demand side economist are super stunned because they can't understand the creativity that always come as a surprise to us and as the heart of captain list economics. >> one of the solutions to government spending that is often discussed a balance budget amendment. something you discuss in "wealth and poverty." i think a bans budget amendment is stupid. it just a gimmick. and since it's a gimmick it can
be counter maned by other gym knicks and other mandate and special regulation. it's almost meaning less. it gives poppation a sense they're doing something to address the problem. they respect doing anything to address the problem. what we need is not account gym knicks. we need unleash america's entrepreneurings on the front fear of the world economy. and we need to enleash america's energy entrepreneurs as well. the u.s. can overcome the energy crisis in a few years by merely unleashing the natural gas and oil of technology that tran formed the petroleum industry in
the last five years the hornet tal tracking and other things that made it possible the smaller footprint on the surface reach fuel than in the past. it's the green energy sources that consume the most valuable part of the global environment which is the surface of the earth. you have solar cells and wind mills and beau owe fuel and all of these while ignoring the almost energy below the surface
of the earth. that can be reached with a small footprint on the earth's. >> george, what is al true rich. how does it fit. >> an orientation toward the need of others. that's an i believe capitalism is intrinsically altruistic. that is to say that capitalism is based on making investments without any assurance that others will respond to them. capitalist investments only work if say that respond imaginatively need of ores. i think capitalism is intrinsically is awe triewlistic. socialism, i believe is intrinessicly based on greed.
the greed for power. i believe that the real greed leads by an invisible hand to the ever growing welfare state. the truly greedy person goes to washington to get guarantees for his investments. and gowrn teed investments are the definition of socialism. socialism tries to guarantee the wort of thicks rather than the rights to the things. the property rights are [inaudible] but you don't have any right to a guarantee of the actual investments. that why all of these green guarantees are so directive. they lure entrepreneurs away from the creative toward lobby
government for special primple. often do you get to washington. now and again. i'm not a very frequent visiter in washington. but five or six times a year. >> what do you think of it? >> i think it's too rich. today washington and the environment contain all the richest counties in america. does that make sense that the people are supposed to be serving us are in fact growing o'obesity with power and privilege. i think that a symbol of daunt. >> how did you get your start studying the topics? >> i began when i was young man. i began writing about sex of all
things. i wrote a book called "sexual suicide." it's men and marriage. and i essentially showed that civilization depend on family life. that it's the ties of family that ultimately connect men in particular to the fure. and thus, i said that man's connection to the future passes through the woman of a woman. and men and marriage. and i believe that the break down of family way back in the early 1970s would lead to a welfare state for the women and children a police state for the boys. because female-headed families are inept at raising boys.
and today we have the welfare state that is some 70 programs taking care of women and children, and we have a police state for the boys for only a third of young black men are in jail on or the lam on on probation. it's a strategy we we have inflicted on the black family. , you know, i said that the black fan could endure [inaudible] better than it could endure lbj. that was -- so, you know, when i started studying poverty, it became evident to me you couldn't really understand poverty unless you understand wealth. after writing a book called "visible man about the welfare state. i wrote wealth "wealth and
poverty." ronald reagan read it and he wrote me and we were off on roaring '70s. we want the roaring ma mean yum or whatever it is today. >> how do you twine wealthy. >> as value. it's a story of worth and a foundation of human creativity. it's the fruits of human creativity. and it's the fruits of surprise. my next book after this is called "knowledge and power." it's about how all enterprise ultimately based on surprise and which is if you get can predict it, you can plan it and you wouldn't need entrepreneurial surprise.
the fact it's unexpected that moons it's dependent on freedom. that's why always program like solyndra and all that are based on controlling and foffing the decisions of entrepreneurs always fail because they are based on the past. they are propping up the past in the name of progress. the future will come as surprise to us. >> in your "wealth and poverty" book in the nature of property you write the refuse sam of american leaders to tell the truth about blacks is more important when it comes to black poverty. roadway schism and discrimination still explain the low-incomes of blacks. this proposition is at once false. not only does it slabbedder white americans, deceives and
demoralizes blacks. not only does it obstruct the truth, it encourages by the essential incredible the ultimate falsehood held in private that blacks and whites they cannot now make it in america without fast federal assistance without intoday very government programs that account for the worst aspects of black poverty and the promise to e fix it. >> and that's under the carter administration. and when 0% of our kids were born out of -- 28 -- 30. it was below 40%. now it's above 70%. of black kids born out of wedlock. and this is as charles show. it's a white problem a much as a black problem all the welfare
state focus opened the inner city. that's why the problem of poverty is worse in the inner city. that's where all the government programs focus their attention. and when people become he dependent on the state they become dependence and lose the ability to watch the surprises of enterprise. and we're seeing that in europe today and we're increasingly seeing it in the united states. thing is a pivotal moment and i think the u.s. can return to its entrepreneurial inspiration. >> so are you making a moral argument. you talk about altruism and the bitter rate and et or the wedlock. >> yeah. i think that -- moral
foundation. capitalism is not based on dog eat dog competition. winners don't eat the losers. the weaponners conduct their experiments and expand knowledge that benefits everyone. and that's why capitalism isn't a zerosome game. it's a positive spiral gain for all. and that all of them opposes on the golden rule of jew day owe christian morality. it's at good fortunately of others is also your own. and it's just the image of capitalism is some vicious predatory system as the opposite of the truth. socialism, when you cut off the future through socialism, block
off the horizon of change and creation. and image of your creator. then you really do have a zerosome gain and everybody fights in the lobbies of washington. and that is ugly facet of the welfare state. >> george, are you working at all with the romney campaign? >> i'm not working with it. it's i work for george romney who was mitt's dad and i wrote a book for him called the mission and the dream which was never published because wriewl from the race. it was because i wrote that book they could write wealthy and poverty so rapidly. it really or yepted originated. a lot of the research in a book i wrote for